Publication Date:

Discipline:

Source:

Product number:

Length:

Also Available in:

description

Acciona, S.A. is a global infrastructure and renewable energy conglomerate that is publicly traded in Spain and controlled by the Entrecanales family. In 2006, the company joined the highly politicized cross-border takeover battle for Spain's largest electric utility, Endesa, by acquiring a 10% stake that it subsequently built up to 21%. Other interested suitors were E.ON and Enel, the largest electric utilities in Germany and Italy, respectively. In March 2007, Acciona's executive chairman Jose Manuel Entrecanales is considering three strategic alternatives: tendering its shares--and realizing a capital gain of 1.2 billion euros, 13% of Acciona's market capitalization; holding out as a strategic but minority shareholder in Endesa; or negotiating an agreement with Enel and/or E.ON.

learning objective:

The case illustrates the interplay between corporate ownership, business strategy, and government relations in an international setting.

Revision Date:

Publication Date:

Discipline:

Source:

Product number:

Length:

Also Available in:

description

Most companies around the world are controlled by their founding families, including more than half of all public corporations in the U.S. and Europe, and more than two thirds of these in Asia. These companies are the subject of the Financial Management of Family and Closely Held Firms course, an elective MBA course at Harvard Business School. The course introduces students to the unique finance, governance, and management issues faced by family firms, and to the ways in which these issues can be addressed. The course provides students with a framework for analyzing how family ownership, control, and management affect value, and whether and how more value can be created for the various stakeholders in family firms. The course is designed for students who may be involved with these companies in a variety of roles, including those of founders, shareholders, or managers of their own family's firm, as well as those of non-family managers and employees, investors or business partners (e.g., private equity investors), and advisors of various kinds (e.g., Investment bankers, board members, or consultants).

learning objective:

This note provides students with an overview of the course, its module structure and its unifying framework. A longer version of the note containing supplemental information for instructors is also available (209-006).

Publication Date:

Discipline:

Source:

Product number:

Length:

Also Available in:

description

To maximize their effectiveness, color cases should be printed in color.

Most large companies operate in more than one business. Valuing a diversified company requires separate valuations for each of its businesses and for the corporate headquarters. This method of valuing a company by parts and then adding them up is known as Sum-Of-The-Parts (SOTP) valuation and is commonly used in practice by stock market analysts and companies themselves. However, it is rarely taught in MBA programs or broached in valuation textbooks. Yet the application of the method raises a number of challenges.

learning objective:

This note describes the main challnges raised by SOTP valuation and how to address those challenges.

Revision Date:

Publication Date:

Discipline:

Source:

Product number:

Length:

Also Available in:

description

To maximize their effectiveness, color cases should be printed in color.

Founders and their families can raise equity without relinquishing control of their companies, through the use of mechanisms such as dual-class stock, pyramidal ownership, voting agreements, and disproportionate board representation. The use of these mechanisms in publicly traded companies is widespread throughout the world, and in the United States. Understanding how the various mechanisms contribute to the separation between economic ownership and control is important for the individuals who set them up because the choice among these mechanisms impacts firm value. It is also important for minority shareholders in these companies and for regulators, for reasons of transparency and investor protection.

learning objective:

This note describes the framework developed and tested by Villalonga and Amit (2009) for measuring controlling shareholders' ownership, voting, and control rights.

Publication Date:

Discipline:

Product number:

Length:

Also Available in:

description

Most companies around the world are family-controlled and/or closely held. The need to value these companies routinely arises in practice for a variety of reasons, e.g ., to buy out minority shareholders; for gift and estate tax purposes; to tie executive compensation to firm performance; to raise outside capital; or to sell the company outright. However, these companies present certain unique characteristics that can make standard valuation methods inappropriate for them.

learning objective:

This note describes how standard valuation methods like DCF or multiples can be adjusted to address the main challenges posed by the valuation of family and closely held firms, and proposes a general valuation framework that can be used to value control in these companies.

*required field. You can change details at any time before activation.

The enrollment number will not limit students' access to materials. Accurate enrollment allows
us to manage site traffic and course activity.

If your course is affiliated with an institution not listed here or you need to create a course to last longer than 6 months,
please contact HBP Customer Service at custserv@hbsp.harvard.edu or 800-545-7685.

Type the information in each box. Boxes marked with an asterisk (*) are required information.
You can change the coursepack information, including the Start and Stop Dates and the quantity,
at any time before you activate the coursepack.

If your coursepack is affiliated with an institution not listed here or you need to create a coursepack
which is longer than 6 months, please contact HBP Customer Service at custserv@hbsp.harvard.edu
or 800-545-7685.